A kitchen is a substantial expense and careful planning can ensure you stay on budget. If you find your investment property is in need of a new kitchen there are a few things that you should know:
A new kitchen is a significant cost for a property investor, but it’s not all bad news! By installing a modern kitchen this will increase the value of your property (hopefully by more than what you have spent!). Your newly updated kitchen may also attract a different quality of tenant and you may be able to increase your rental yield.
The cost of your new kitchen will not be fully tax deductible, but we will be able to claim depreciation. The amount we can claim depends on the item in question. As an example, a new oven is depreciated much faster than the kitchen cabinetry surrounding it.
As the old kitchen has been demolished, any items that you were depreciating will be able to be written off in full.
When providing us with your tax return information, preparing a summary all of your receipts for the new Kitchen will enable us to easily determine how to get the best result on your tax return.
If you have any questions regarding renovations to your investment property and the tax implications please contact the team or myself at Paris Financial on 03 8393 1000.
Rebecca Mackie, Partner, Paris Financial